Nutanix stock plummets more than 20% after earnings included bad forecasts

Nutanix Inc. shares plunged more than 20% in after-hours trading Wednesday after a poor fourth-quarter forecast.

Nutanix NTNX,
Executives were expecting fourth-quarter revenue of $340 million to $360 million and billings of $175 million to $185 million, according to FactSet, while analysts averaged revenue of $439 million and billings of $215.8 million. counting dollars. As a result, they lowered their full-year guidance to $1.54-$1.56 billion in revenue, after previously saying about $1.63 billion and billings of $735-$745 million, after previously stating 760-$760 reported $765 million.

“Late in the third quarter, we saw an unexpected impact from challenges that limited our upside potential in the quarter and impacted our fourth-quarter prospects,” Chief Executive Rajiv Ramaswami said in a statement. “Increased supply chain delays at our hardware partners account for the bulk of the impact on our outlook, and the higher-than-expected turnover of sales representatives in the third quarter was also a factor.”

“We do not believe these challenges reflect changing demand for our hybrid multicloud platform, and we remain focused on mitigating the impact of these issues and continuing to capitalize on the opportunities that present themselves.”

Supply chain issues have tech companies that rely on hardware in recent weeks with Cisco Systems Inc. CSCO,
as a prime example. Nutanix has tried to move away from its hardware roots and focus on “hyperconverged” software, but Cisco executives found that software sales were also being held up by customers who needed appropriate hardware to run the software.

For more: Cisco blames China lockdowns for its projected cut, but there could be deeper issues

Like Cisco, Nutanix hit its numbers while posting a disappointing guidance. Nutanix reported a loss of $111.6 million, or 50 cents a share, in the third quarter; after adjusting for stock-based compensation and other effects, Nutanix reported a loss of 5 cents a share, an improvement from last year’s adjusted loss of 41 cents a share. Revenue increased to $403.7 million from $344.5 million in the prior year, and billings increased to $204.7 million from $159.9 million. On average, analysts were expecting an adjusted loss of 22 cents a share on sales of $398 million and billings of $197.9 million, according to FactSet.

Nutanix shares are down 32.8% so far this year, as is the S&P 500 index SPX,
has fallen by 17.3%. Nutanix stock plummets more than 20% after earnings included bad forecasts

Brian Lowry

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